Will Physicians Be Dropped From Managed Care Networks?

Insurers are dropping thousands of physicians from their managed care networks. For the physicians allowed to stay, reimbursement rates may be cut so much that they will wonder whether being dropped was the better outcome.

This article appears in the February 2014 issue of Managed Care Contracting & Reimbursement Advisor.

Insurers are dropping thousands of physicians from their managed care networks in response to growing pressures from the Affordable Care Act (ACA), leaving many doctors to wonder what plans they will still participate in for 2014 and beyond. But that's not all. If the insurer lets you stay, reimbursement rates may be cut so much that you will wonder whether being dropped was the better outcome.

UnitedHealth Group confirmed recently that it sent discontinuation letters to thousands of physicians in 10 states that cited "significant changes and pressures in the healthcare environment" as the cause. The company issued a statement saying that it expected its Medicare Advantage network, which covers about 27% of people on Medicare, to remain at about 85% of its 2013 size through the rest of 2014. The insurer currently has more than 350,000 providers in the Advantage network. (See the sidebar on p. 3 for UnitedHealth's explanation of why the cuts were necessary.)

Humana, Aetna, and WellPoint have confirmed publicly that they may trim their provider networks as well. The moves are not surprising because health plans are subjected to multiple pressure points as they attempt to craft competitive affordable products for the new health insurance exchanges while dealing with compression of Medicare and commercial revenue pressures, says Hank Osowski, cofounder and managing director of Strategic Health Group, a healthcare consulting firm in Los Angeles.

F.H. Netter (2/17/2014 at 4:42 PM)
This is just one more reason the for-profit health insurance system must go. We need single payer and we need it yesterday.

Barbara Ryan (1/23/2014 at 8:09 PM)
Insurers only have to "rein in costs" in order to maintain (or grow) their profit margins. Insurers have been decreasing payments to providers while increasing charges to those they insure for a long time. Obamacare is only the tip of the iceberg of making medical care accessible and affordable[INVALID]insurance industry reform and regulation is also critical.

Doyle (1/23/2014 at 4:48 PM)
Looks like some high quality physicians will draw the higher income patients. Ones that can afford out of network fees. That would be different